I’ve had some tough inter­views over the years (such as the BBC HARDtalk! inter­view ear­li­er this year with Stephen Sack­ur), but I’d have to cred­it the stu­dent inter­view­ers at the Uni­ver­si­ty of Ams­ter­dam’s Room for Dis­cus­sion event with giv­ing me the tough­est, well-informed grilling my ideas have had in pub­lic. I’m fol­low­ing up lat­er today with a keynote speech at the Dutch Rethink­ing Eco­nom­ics event tonight, and I’ll post that here lat­er this week.

Appar­ent­ly it’s the fifth anniver­sary of the day I gave this talk, to the Occu­py move­ment in Syd­ney, in Mar­tin Place, right out­side the offices of the Reserve Bank of Aus­tralia. The day after, the site was shut down by the police. It seems I was jinxed, because the same thing hap­pened in New York, the day after I sim­ply dropped off a cou­ple of copies of my book Debunk­ing Eco­nom­ics. The speech holds up pret­ty well, though I’ve devel­oped my tech­ni­cal argu­ments a lot since then.

I have observed and appre­ci­at­ed Olivi­er Blanchard’s intel­lec­tu­al jour­ney over the last decade. It began in August 2008, with what must be regard­ed as one of the worst-timed papers in the his­to­ry of eco­nom­ics. In a sur­vey of macro­eco­nom­ics enti­tled “The State of Macro”, he con­clud­ed, one year after the finan­cial cri­sis began, that “The state of Macro is good” (Blan­chard, 2008). How­ev­er, Blan­chard did not remain locked into that posi­tion, and he had the rare intel­lec­tu­al courage to say so in pub­lic and in aca­d­e­m­ic papers. His most recent post, before the one I am respond­ing to today (“Fur­ther Thoughts on DSGE Mod­els: What we agree on and what we do not”), stat­ed that, far from the state of macro being good:

For decades, main­stream econ­o­mists have react­ed to crit­i­cism of their method­ol­o­gy main­ly by dis­miss­ing it, rather than engag­ing with it. And the cus­tom­ary form that dis­missal has tak­en is to argue that crit­ics and pur­vey­ors of alter­na­tive approach­es to eco­nom­ics sim­ply aren’t capa­ble of under­stand­ing the math­e­mat­ics the main­stream uses. The lat­est instal­ment of this slant on non-main­stream eco­nom­ic the­o­ry appeared in Noah Smith’s col­umn in Bloomberg View: “Eco­nom­ics With­out Math Is Trendy, But It Does­n’t Add Up”.

A cliché—“Expect the Unexpected”—has hap­pened. As I not­ed in “The Divi­sive Brex­it Vote”, though I favoured Brex­it, I took the opin­ion polls at face val­ue, and expect­ed that Britain as a whole would vote to remain in the EU. Instead, in the largest elec­toral turnout in twen­ty years, the UK vot­ed 52:48 in favour of leav­ing the EU.

I’ll leave a post-mortem of the vote itself for lat­er; the main inter­est now is what will hap­pen because of it. Many pun­dits from the Cen­ter, Left and Right opposed Brex­it in the belief that eco­nom­ic Armaged­don for Britain and the globe would flow from it; we’ll now see how real­is­tic their fears were. I regard them as seri­ous­ly overblown, for a num­ber of rea­sons.

Andrew com­ments that he broad­ly agrees with my eco­nom­ic analy­sis on most issues, but vehe­ment­ly oppos­es me here. Like­wise, good friends like the het­ero­dox econ­o­mist Geof­frey Hogdg­son; Ann Pet­ti­for, who led the suc­cess­ful Jubilee 2000 cam­paign to can­cel the debt of the world’s poor­est nations; and Yanis Varo­ufakis, who knows a thing or two about the EU, all strong­ly sup­port Remain.

Note: This was published as my last column on Business Spectator on April 6th, but it’s now gone missing after News Ltd merged BS with its own in-house stable and changed all the URLs. Given the election and Elizabeth Farrelly’s excellent thought piece in the Sydney Morning Herald “The great tragedy of Malcolm Turnbull”, I thought it was a good time to revive it.

One of the dis­ad­van­tages of grow­ing up is find­ing in your old age that peo­ple you nev­er took seri­ous­ly in your youth are now run­ning your coun­try.

Video overview

Debunking Economics II

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